Yahoo Finance Property upswing continues - but some economists are tipping a drop this year
The median value of a home in Australia is now $759,437.
Australia’s property market upswing continued in January, with values rising 0.4 per cent, but one expert thinks there could be a “modest” price fall later this year.
January marked the 12th straight month of home value increases, CoreLogic’s latest Home Value Index found, and it was up from 0.3 per cent increases in November and December.
The median value of a home in Australia has now risen to $759,437. Sydney values were up marginally to $1,122,430 (up 0.2 per cent), while Melbourne recorded a small decline to $777,250 (down 0.1 per cent).
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Perth, Adelaide and Brisbane led the price gains, helped by relatively better affordability, with values up 1 per cent or more during the month.
CoreLogic research director Tim Lawless said Perth was a standout among the capital cities, recording the biggest monthly growth of 1.6 per cent.
“The western capital continues to see housing demand outweigh supply, helping to push values 16.7 per cent higher over the past 12 months,” Lawless said.
“Despite that, housing prices remain relatively affordable compared with most capital cities, with the median dwelling value sitting just under $677,000.”
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House values are continuing to grow quicker than units. Capital city houses have surged 11 per cent since the start of the upswing, while units are up 6.9 per cent.
Regional markets are now growing more strongly than capital cities, with values up 1.2 per cent over the quarter, compared to 1.0 per cent for the capitals.
Inflation, interest rates, credit policy, consumer sentiment and demographic trends will be key factors shaping the outlook for the rest of 2024, the report said.
‘Modest fall’ a possibility
Commenting on CoreLogic’s latest data, AMP chief economist Shane Oliver said he expected property prices would fall by 3 to 5 per cent this year.
“Our assessment has been that the high rates, along with signs that immigration levels have peaked, waning savings buffers and access to ‘the bank of mum and dad’, and higher unemployment would see property prices fall again this year with a modest 3-5 per cent fall, albeit with significant divergence between cities,” Oliver said.
He said this remained AMP’s “base case” but noted property price gains were showing signs of stabilising and resilience, potentially helped along by interest-rate-cut expectations.
“This could be upset by a sharp rise in unemployment – say above 5 per cent - but, for now, we would have to concede that there is a high risk that this turns out to be another very mild property downswing, with rate cuts providing the impetus for a renewed upswing from later this year,” he said.
Like most experts, Oliver is expecting the Reserve Bank to leave rates on hold at its meeting next week. He forecasts rate cuts starting from around the middle of the year.
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